Inventory optimization is a strategy to balance the amount of working capital that is tied up on inventory into the inventory with service level objectives across the multi-store keeping units. It is integral component of supply chain system. Balance sheet contains it as an operating asset.
Inventory can be good or bad for the organization based on the lack and excess of its availability. Excess of inventory helps to improve the services for customers but increase the cost of inventory holding. Lack of inventory leads to the dissatisfaction of customers. Firms ever try to reduce the inventory to an optimum level.
Whereas, reduction of inventory in balance sheet ultimately leads towards the reduction in operating assets and cause the increase in financial assets. Moreover, if cash to cash cycle time is too less then inventory will quickly turn into cash. Thus, it makes the organization’s stronger and attractive.
You can achieve the several financial benefits by employing inventory optimization of ERP Gold. Some inventory optimization techniques are mentioned here:
Demand Forecasting:
Inventory Optimization software provides a fully automated and user friendly demand forecasting. This system is well suited for wholesalers and retailers with the availability of accurate forecasting based on real time data. Demand and supply factors are the important functions of any business. By optimizing the inventory, you can control the expenses of your entire business and helps you to plan about the future.
Inventory Optimization Metrics:
Inventory optimization software facilitates you by automatically generating metrics for reorder point, order quantity, demand lead, stock covers, maximum accuracy and more key inventory optimization data. Even you can get your all required data or information in single metrics comprehensively at any time. A detailed record about the business helps you to understand the daily activities with financial and numerical terms.
Reorder Points:
Inventory optimization software will help you to setup the reorder points with inventory optimization data and receiving the notification whenever a stock replenishment is hardly needed for the business. The data of all activities is automatically pushed to the main server for security purposes. It represents the detailed history of each product or service by making it easy to see a comprehensive look for qualitative and quantitative data, date and assigned tasks to other workers.